Epic Games Pays With Record $520 Million To Settle FTC Lawsuit

epic games hit with 520 million settlement by ftc 273708

The US Federal Trade Commission has recently fined Epic Games with a record-breaking penalty for Fortnite’s controversial underlying game structure.

With the latest Fortnite update bringing many sweet Unreal Engine 5 updates and more, the game’s developer Epic Games, has been under flak by the US Federal Trade Commission (FTC). The game company was hit with an unprecedented $520 million USD penalty. The FTC noted allegations of past “lax privacy practices” with its voice and text chat, and how the company had “duped millions of players” into unintentional purchases.

The FTC cracked the whip on Epic Games in relation to Fortnite violating the US Children’s Online Privacy Protection Act (COPPA) since the game allowed in-game chat and user data collection by default. This data was collected for all players, even those under the age of 13, without parental consent from a parent or guardian.

The complaint on the chat system was that Epic Games broke the FTC Act when it allowed real-time voice and text communications for teens and children by default. Complaints noted that some players were susceptible to being bullied, threatened, harassed, and exposed to dangerous and psychologically traumatizing issues.

Epic Games Hit With $520 Million Settlement By Ftc 2

Epic Games has now prohibited enabling voice and text chat for children and teens unless formal in-game consent was set within the privacy setting. On Epic Games’ alleged skewed in-game purchasing tactics, the FTC noted that “Fortnite’s counterintuitive, inconsistent, and confusing button configuration led players to incur unwanted charges based on the press of a single button.”

The FTC continued explaining their argument, “For example, players could be charged while attempting to wake the game from sleep mode, while the game was in a loading screen, or by pressing an adjacent button while attempting simply to preview an item.” Of course, the simplicity of purchasing in-game items with real currency has evolved since 2018.

The counterpoint the FTC stated was that Epic Games initially ignored more than one million user complaints over players being wrongfully charged. The FTC Chair Lina Khan, shared the FTC’s collective thoughts on the matter:

“As our complaints note, Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children. Protecting the public, and especially children, from online privacy invasions and dark patterns is a top priority for the Commission, and these enforcement actions make clear to businesses that the FTC is cracking down on these unlawful practices.”

Epic Games Hit With $520 Million Settlement By Ftc 3

Epic Games released a blog post today, responding to how the company would be making the changes they were fined for, as advised by the FTC. The main topics on the blog covered topics on “payment and refund systems”, “children’s privacy,” and “enhancing Fortnite over time.”

The Epic Games post stated how “no developer creates a game with the intention of ending up here…We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.”

The blog post echoed sentiments of apology throughout: “We will continue to be upfront about what players can expect when making purchases, ensure cancellations and refunds are simple and build safeguards that help keep our ecosystem safe and fun for audiences of all ages.”

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